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Macro AD-AS Model
?In Exhibit 10A-4, the level of real GDP represented by Yp:
A. ?would be associated with considerable unemployment.
B. ?indicates that the economy is experiencing zero inflation.
C. ?indicates that the economy is experiencing a recessionary gap.
D. ? is potential real GDP for this economy.
Answer: D
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According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be
A) 1 million gallons of gasoline per month. B) 2 million gallons of gasoline per month. C) 3 million gallons of gasoline per month. D) 4 million gallons of gasoline per month.
For a risk-neutral person, the expected utility associated with various levels of wealth
A) is above the person's utility function. B) is below the person's utility function. C) is equal to the person's utility function. D) does not exist.
Refer to the graphs, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. A shift in the aggregate demand curve from AD3 to AD2 can be achieved by Federal Reserve action to:
A. Increase the reserve ratio
B. Increase the discount rate
C. Buy government securities in the open market
D. Sell government securities in the open market
Under the average-cost inventory method, to determine the average cost per unit:
What will be an ideal response?